India, Japan Set For Rare Earth Mining (Ad)Venture

They may be found in small quantities, but the rare earth metal and mineral sector is turning out to be a big area of cooperation between India and Japan.

Indian news reports suggest that Prime Minister Manmohan Singh is expected to sign an inter-governmental agreement with Japan when he travels to Tokyo in November. The pact will kick off the joint development of rare earth metals in India.

Coming barely five months after Tokyo announced that India had agreed to provide Japan with a stable supply of rare earth minerals, the PM’s visit is keenly awaited. Watching from the sidelines obviously will be China, the country that currently enjoys a monopoly over rare earth supplies to the rest of the globe.

It should be even more interesting because the new round of Indian-Japanese rare-earth cooperation started after a spat began between Japan and China some months ago. Both nations are in a face-off with each other over the controversial ownership of the Senkaku/Diaoyu islands.

Rare earth elements are almost indispensable for defense needs and for white goods like touch-screen phones, flat screen TVs, hybrid cars, laser and microwave equipment, and even medical equipment.

India has already assured Japan of long-term cooperation in the supply of rare earth minerals.

MetalMiner had reported last month that India had decided to start a new plant to extract REEs and ECEs from monazite in the eastern State of Odisha. The plant will likely be commissioned this December. Indian Rare Earths Ltd (IREL) and Japan’s Toyota Tsusho are setting up a second, 12,000-metric-ton monazite processing plant. Both these plants are expected to produce high-purity RE oxides used in permanent magnets and also cerium, which is used in catalytic converters.

The Indian government, it is said, is leaving no stone unturned for the prime minister’s November visit. Singh has insisted on meeting every Japanese leader despite elections being called at any moment. In Japan a bilateral agreement on rare earths would be of immensely more value to India than to the Japanese, both business-wise and for geo-political reasons.

India is trying its best now to ensure that China’s loss, at least on Japan’s front, will be its gain. Also, what is fuelling India’s interests is that an alignment over REE could well mean putting up a formidable geo-strategic wall to halt increasing Chinese assertiveness in the region on other fronts like territory and trade and commerce.

Incidentally, India was the world’s leading rare earths producer in the 1950s, followed by the US through the 1960s and 1980s, but had halted production afterwards because of Chinese monopoly. But with China-Japan relations now under strain, India is once again trying to gain a hold in a market in which it was once an active player.